The banks will continue to cross-sell their underperforming superannuation products to the public despite the findings of the Australian Bankers Association (ABA)-sponsored Sedgwick Review, according to Industry Super Australia (ISA).
ISA chief executive, David Whiteley acknowledged that the Sedgwick Review recommendations had “rightly addressed” some of the unconscionable conflicted remuneration practices seen within the banking sector but claimed it had failed to address remuneration practices used to cross-sell superannuation products.
“This failure to consider super in the review will allow the big banks to continue to cross-sell super in an attempt to get their hands on more workers’ super,” he said.
Whiteley claimed the cross-selling of superannuation products to banking customers through general advice should be subject to a “better-off” to ensure consumers are not disadvantaged by the switch.
He said the banks needed to address the cross-selling of compulsory superannuation urgently and if they failed to do so the Government needed to step in.
"Australians shouldn't walk out of a bank branch worse off than when they walked in,” Whiteley said. "A comprehensive ban on sales incentives for staff and a "better-off test" is now required to protect the public from the cross-selling of compulsory super by banks".
“The ‘for-profit’ culture enshrined in the banks business model raises questions of the appropriateness of banks’ involvement in compulsory superannuation, given super is a mandatory savings system central to Australia’s long-term economic and social prosperity.” he said.